Mexico’s inflation rate has surged to 4.22% in the first half of May, exceeding expectations and pushing above the 4% threshold for the first time since December last year. The sharp increase is largely attributed to rising prices of beef and poultry, which have been affected by a crisis involving the cattle tick and avian flu.
According to data released by the National Institute of Statistics and Geography (Inegi), Mexico’s inflation rate rose 0.09% in the first quarter of May, marking the largest increase for this period since 2020. This unexpected spike has left experts concerned about the country’s economic outlook.
The surge in meat and poultry prices has been particularly pronounced, with beef experiencing a staggering 16.24% annual increase – its highest jump since April 2022. Poultry prices have also risen sharply, with chicken increasing by 11.07% and turkey rising by 10.26%.
Analysts attribute the price hikes to a combination of factors, including the temporary ban on Mexican beef imports due to the detection of cattle ticks in the US and the suspension of Brazilian poultry imports following cases of avian flu H5N1.
The crisis has put significant pressure on Mexico’s agricultural sector, with drought conditions deteriorating and potentially driving up prices for certain products. For instance, avocado prices rose by 37.85% annually, while papaya prices increased by 28.49%.
Despite the recent downturn in economic activity, experts warn that the inflationary pressures will persist in the coming months. Gabriela Siller, director of economic and financial analysis at Grupo Base, notes that the underlying component of inflation – which determines medium- to long-term trends – has shown a disturbing upward trend.
Siller’s concerns are echoed by Alejandro Saldaña, chief economist at Ve por Más Group, who points out that the depreciation of the Mexican peso and potential effects of US trade policies may also contribute to ongoing inflationary pressures.
Meanwhile, services prices have moderated their growth in May, rising by 4.49% after a sharp increase in April due to delayed Easter celebrations. However, experts caution that this sector’s growth remains strong despite economic weakness, fueled by rising labor costs.
While expectations suggest that inflation may decline in the coming months as economic activity slows down, analysts warn of potential risks and uncertainties ahead.
Source: El Universal
